"The shift to e-commerce is increasing the demand for transportation services broadly and putting a lot of stress on labor markets. … We believe the incumbent networks of UPS, FedEx, and USPS are uniquely positioned to deliver that next decade of growth," Vernon wrote in a note to clients. "Delivering through Amazon clearly has a cost. For merchants fulfilling by Amazon, that cost is going up significantly this year."

The analyst added that while Amazon Prime members enjoy "free" shipping, the company increased the price of the membership in January to $12.99 a month, up from $10.99 a month. Merchants fulfilling deliveries via Amazon are also likely to see an increase in fees in 2018, Vernon added.

"While many in the market lament that 'free' shipping will be dilutive to pricing, it does not seem to us that Amazon has any lack of confidence in its ability to charge more for shipping services," the analyst explained. "Given that the clear majority of Amazon parcels are delivered by a commercial carrier, we think Amazon's move to raise rate here is a lot more telling about the direction of future parcel pricing."

In addition to upgrading shares, Vernon increased his price target on FedEx to $290 from $257, implying more than 18 percent upside over the next 12 months. He sees the stock gaining more than 28 percent over the next two years.